TRICIA KATE JOY V.

CERVANTES
11-ABM ARCHIMEDES

PART 1: Multiple Choice

1. A
2. D
3. D
4. C
5. A
6. D
7. C
8. B
9. B
10. D
11. B
12. C
13. C
14. B
15. C

PART 2: Enumeration
Porte’s Five Forces Analysis
1. Competitive Rivalry
2. Threat if Substitutes
3. Bargaining Power of Buyers
4. Bargaining Power of Suppliers
5. Threats of New Entrants

Types of Entry Barriers

1. Economic of Scale
6. Production Differentiation
7. Capital Requires
8. Cost Advantages Independent of Scale
9. Switching Costs
10. Access of Distribution Channels
11. Governmental and Legal Barriers

PART 3: Critical Thinking

1. These forces analyzes how much power a business’ supplier has and how much control it has over the
potential to raise its prices, which, in turn, lowers a business’ profitability. It also assesses the number of
suppliers of raw materials and other resources that are available.
• Competitive Rivalry- this force examines how intense the competition is in the
marketplace. It considers the number of existing competitors and what each one can
do.
 • Bargaining Power of Suppliers- this force analyzes how much power a business's
supplier has and how much control it has over the potential to raise its prices, which, in
turn, lowers a business's profitability.
• Bargaining Power of Buyers- this force examines the power of the consumer, and their
effect on pricing and quality. Consumers have power when they are fewer in number
but there are plentiful sellers and it's easy for consumers to switch.
• Threat of New Entrants- this force considers how easy or difficult it is for competitors
to join the marketplace. The easier it is for a new competitor to gain entry, the greater
the risk is of an established business's market share being depleted.
• Threat of Substitute products or services- this force studies how easy it is for
consumers to switch from a business's product or service to that of a competitor. It
examines the number of competitors, how their prices and quality compare to the
business being examined, and how much of a profit those competitors are earning,
which would determine if they can lower their costs even more.

2. Substitute products offer consumers choices when making purchase decisions by

providing equally good alternatives, thus increasing utility. However, from a company’s
perspective, substitute products create a rivalry. As a result, businesses may incur
high marketing and promotional costs when competing for market share, which, in
turn, reduces operating profits.